Cloud Computing

Enterprise Cloud is More About Operational Efficiency Than Cost Savings: KPMG Report

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Enterprises have been more successful in 2014 achieving their cloud computing goals than in past years by focusing on actual business outcomes rather than just reducing costs, according to a new survey from KPMG.

KPMG’s 2014 Cloud Computing Survey (PDF), analyzed the responses of more than 650 senior executives across 16 countries and various industries.

According to the survey, through the implementation of cloud solutions, 73 percent of enterprises were able to improve business performance, 72 percent improved service automation, and 70 percent had reduced costs. These enterprises have been able to create solutions to empower mobile workforces, and improve business processes and automate services.

Study authors Steven Hill and Rick Wright said, “[A] greater focus is being placed in new areas including getting the business process redesign right, facilitating appropriate change processes and business model improvements, and moving more core functions to the cloud.”

The survey suggests businesses are becoming more comfortable with the benefits as well as the risks of the cloud at a time when most enterprises are adopting some form of cloud technology. Many businesses have ambitions to move more business processes to the cloud in the next 18 months, facilitated by growing cloud budgets.

Cloud is being seen as more than a way of saving money, but rather as something more central to their business, and is being treated as such. “[I]n order to reap the full benefits of cloud adoption…organizations must also transform their business processes, or they run the risk of misinterpreting the short term IT savings as success, while the longer term strategic business objectives go unrealized,” Hill and Wright note.

Enterprises are also faced with new challenges following the initial adoption period which is clearly over. Security and performance capability had been the top concern, however this has moved towards more “nuts and bolts” considerations around implementation including integration, operations and governance. As enterprises gain experience in these areas, however, a body of knowledge is starting to form, which is helping with the development of best practices.

When evaluating cloud-based applications and service providers, respondents said they are most likely to make their choices based on security first (82 percent), followed by data privacy (81 percent) and cost (78 percent).

This increased focus on security and privacy is unsurprising given the recent high-profile incidents of data breaches involving major brands including JP Morgan, Kmart, Dairy Queen,Home Depot, Xbox, ICANN and Sony.

While cloud is clearly becoming more widespread among enterprises, the authors of the KPMG report note: “the resulting journey [towards Cloud] is proving more complicated and challenging than many had originally anticipated. That said, it is clear that – with greater experience and a few hard-won lessons – executives continue to believe that the benefits of cloud adoption far outweigh any growing pains that they may experience through implementation.”

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  1. Jon Mannick

    The KPMG report you link to is from 2013 not 2014....